BIMB Integrated Annual Report 2019

47 CAPITAL ADEQUACY (CONTINUED) The components of CET I, Tier I and Tier II capital of the Group: Group 2019 2018 RM’000 RM’000 Tier I capital Paid-up share capital 4,307,819 4,082,939 Retained earnings 1,924,475 1,622,123 Other reserves (946,505) (1,152,207) Less: Investment in subsidiary (99,053) (99,053) Deferred tax assets (34,431) (52,054) Gain on financial instruments classified as fair value through other comprehensive income (107,543) (4,928) Regulatory reserve (25,000) (10,000) Total CET I and Tier I Capital 5,019,762 4,386,820 Sukuk Murabahah 1,300,000 1,300,000 Collective assessment allowance and regulatory reserve ^ 443,476 445,483 Total Tier II Capital 1,743,476 1,745,483 Total Capital 6,763,238 6,132,303 ^ Collective assessment allowance on non-impaired financing and regulatory reserve, subject to maximum of 1.25% of total credit risk-weighted assets less credit risk absorbed by unrestricted investment accounts. The breakdown of risk-weighted assets by each major risk category is as follows: 2019 2018 RM’000 RM’000 Credit risk 42,746,503 39,133,750 Less: Credit risk absorbed by unrestricted investment accounts (7,268,408) (3,495,144) 35,478,095 35,638,606 Market risk 580,444 422,763 Operational risk 3,603,044 3,425,864 39,661,583 39,487,233 47.1 Takaful Malaysia Takaful Malaysia’s capital management policy is to optimise the efficient and effective use of resources to maximise the return on equity and provide an appropriate level of capital to protect participants and meet regulatory requirements. Takaful Malaysia is required to comply with the regulatory capital requirement prescribed in the Risk Based Capital for Takaful (“RBCT”) Framework issued by BNM where Takaful operators are required to satisfy a minimum capital adequacy ratio of 130%. As at period end, Takaful Malaysia has a capital adequacy ratio in excess of the minimum requirement. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 (CONTINUED) 267 BIMB HOLDINGS BERHAD 199701008362 (423858-X) Shareholders’ Information Financial Statements Additional Information Disclosure Summary